Modesto City Council
May 10, 2022

DISCUSSION:

A shared mobility device is an electrically motorized board, scooter, bicycle or other similar personal transportation device as defined in Section 313.5 of the California Vehicle Code2 (CVC) that is made available to the public by a service provider for a fee.

On September 18, 2020, Governor Newsom signed AB 1286, a bill requiring a local jurisdiction that authorizes a shared mobility device provider to operate within its jurisdiction on or after January 1, 2021, to adopt operation, parking, and maintenance rules, as provided, regarding the use of the shared mobility devices in its jurisdiction before the provider may offer shared mobility devices for rent or use. Part of the bill’s requirements also state that the authorized provider must maintain minimum levels of insurance, as stated in the bill, for bodily injury or property damage, including contractual liability, personal injury, and product liability and completed operations.

The CVC currently regulates the rules of the road for the operation of various shared mobility devices, including: scooters, bicycles or other means of transportation. Regarding the use of motorized scooters, some examples of recent laws regarding their use include:

1. Helmets if under 18 years of age

2. A driver’s license or instruction permit is required to operate

3. No passengers are allowed

4. No riding on sidewalks unless entering or leaving an adjacent property

5. 15 mph speed limit for the scooter

6. Must ride in a bike lane if the road has a speed limit greater than 25 mph.

Like with the robot delivery program3, the City is considering a pilot scooter share program, which will include approval of an agreement with Bird Rides, Inc. (Bird), that provides the framework for a possible future ordinance permitting shared mobility device providers, and defines the foundation for which to operate within the City.

Bird and the City have coordinated to draft a twelve (12) month Pilot Operating Agreement. If approved, the program would launch with a maximum of 100 electric scooters throughout the City with the exception of areas in which vehicles are not allowed to enter. Bird would be responsible for all maintenance and operations and would indemnify the City of any liability. Bird would provide 24-hour customer service for safety concerns and complaints, along with some general ride activity data to improve the program in the City over time.

Bird currently operates within over 100 cities worldwide, including the following list of relatively comparable sized jurisdictions or of close proximity:
• Tracy, CA
• Little Rock, AR
• Boise, ID
• Hollister, CA
2 Section 313.5 of the California Vehicle Code -
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=VEH&sectionNum=313.5 3 Starship Technologies Partners with Modesto Save Mart for Grocery Delivery Robots - https://www.modestogov.com/Blog.aspx?IID=61
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City of Modesto, May 3, 2022
Consider a Pilot Operating Agreement for Stand-Up Electric Scooter Sharing Program with Bird Rides, Inc.

• Pueblo, CO
• Redding, CA
• Durham, NC
• Richmond, VA
• Sacramento, CA
It should be noted that the City of San Diego has recently sued several shared mobility providers, including Bird Inc., Lyft, Wheels Lab Inc., Skinny Labs Inc., among others that operate within the city through Operating Agreements. According to a November 9, 2021 article in the San Diego Tribune4, the City’s lawsuit against the shared mobility providers comes after disability-rights advocates sued the City alleging that scooters were being left in the public right of way and were allowed to operate on City sidewalks—impeding pedestrian traffic and causing risk to the public, especially those with disabilities.

The Operating Agreements between the providers and the City require the providers to defend San Diego from litigation regarding the shared mobility devices. The City has asked a judge to enforce the applicable provisions within the operating agreements requiring the providers to indemnify the City against any damages and to pay the City’s cost to defend any lawsuits generated by the providers’ operations.

A Bird representative indicated the City of San Diego contracts with several shared mobility device providers providing approximately 3,000 scooters each. In contrast, the Modesto pilot program includes one provider supplying a limited number of scooters.

During the 2019 discussions on a potential scooter share program, City staff heard concerns from the Economic Development Committee (EDC) and the City Council regarding these programs (as well as the potential positive features). From these conversations, City staff has worked closely with Bird to ensure these concerns are fully addressed and are well documented in the agreement. These concerns include:
- Ensuring the scooters do not become a blight to the community, that they are well maintained and taken care of and do not become strewn across sidewalks and throughout the community.
- Ensuring, to the greatest extent possible, that scooters are not operated and do not end up in places where they do not belong.
- Ensuring, to the greatest extent possible, the safety of the scooter user and other travelers who may come across scooter users.

The primary tool to address the blight concerns is the provision of a Bird fleet manager. Bird will provide a fleet manager for every 200 scooters in Modesto. While the maximum number of scooters to start is 100, Bird, with the City’s approval, has the option to increase this number by up to 50 scooters each month after 6 months. Therefore, if Bird were to get above 200 scooters, they would provide a second fleet manager to ensure the scooters are corralled appropriately, remain in a state of good repair and stay in locations that they are allowed and are usable.
4 https://www.sandiegouniontribune.com/news/watchdog/story/2021-11-09/city-of-san-diego-sues-scooter-firms-toget-them-to-pay-in-case-of-litigation #15..
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City of Modesto, May 3, 2022
Consider a Pilot Operating Agreement for Stand-Up Electric Scooter Sharing Program with Bird Rides, Inc.

There are few direct ways to address the safety concerns, which primarily include Bird providing information to each user through the mobile device application, which is used to secure the ride.

With current resources, this will be a difficult issue for the Modesto Police Department to enforce.

To further address the concerns of the EDC, at the December 2021 EDC meeting, City staff proposed a tool that would help the City monitor the use of the scooters and the overall program. This tool, called Populus, is a third-party software platform intended to manage micromobility programs. The program will allow the City a more refined view of the use of the scooters across the City, to establish rules for use in various areas of the City, and to monitor the overall program and effectiveness of management efforts. This software costs approximately $4,500 per year.

COMMITTEE RECOMMENDATION:

In December 2021, the EDC considered this item and approved recommending to council a Pilot Scooter share program with Bird. Further, the EDC recommended considering City staff’s recommendation of utilizing a third-party software program to monitor the Pilot Program.

FISCAL IMPACT:

There is no direct cost associated with this Pilot Operating Agreement for Stand-Up Electric Scooter Sharing Program with Bird Rides, Inc. Per the Agreement, Bird is responsible for all maintenance, operation and capital equipment costs associated with the program. However, there will be costs associated with staff oversight of the program, the Operating Agreement and monitoring the third-party software program. It is estimated that multiple staff in multiple departments will be responsible for the oversight of the program.

This program will generate revenue for the City. The operating agreement requires Bird to pay the City of Modesto $0.10 per ride to help fund alternative transportation improvements within the Pilot Area. Based on initial estimates this likely equates to approximately $10,000 per year.

Staff estimates that the revenue generated from the program will not fully cover the purchase of the third-party software at $4,500 per year and the staff time associated with oversight of the program, and therefore associated staff time costs will be assumed and covered by the General Fund. As a new program, the staff time needed to monitor the program, the operating agreement and the third-party software system is unknown at this time.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the creation of a pilot program to allow the use of a shared mobility service of stand-up electric scooters in the City of Modesto and issuing a shared mobility (SM) permit to Bird Rides, Inc, with such terms and conditions defined by the operating agreement, and as determined necessary by the City Manager, and authorizing the City Manager or designee to execute the Agreement.
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City of Modesto, May 3, 2022
Consider a Pilot Operating Agreement for Stand-Up Electric Scooter Sharing Program with Bird Rides, Inc.

Approved by:

Jaylen French, Director of CEDD
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Agreement
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE CREATION OF A PILOT PROGRAM TO ALLOW

THE USE OF A SHARED MOBILITY SERVICE OF STAND-UP ELECTRIC SCOOTERS

IN THE CITY OF MODESTO, AND ISSUING A SHARED MOBILITY (SM) PERMIT TO BIRD RIDES, INC. WITH SUCH TERMS AND CONDITIONS DEFINED BY THE

OPERATING AGREEMENT, AND AS DETERMINED NECESSARY BY THE CITY

MANAGER, AND AUTHORIZING THE CITY MANAGER OR DESIGNEE TO

EXECUTE THE AGREEMENT
WHEREAS, the City Council desires to institute a pilot program to allow a stand-up electric scooter sharing program in the City of Modesto for the purpose of increasing micromobility transportation services for citizens of the City (the “Program”); and WHEREAS, shared mobility devices such as electric bikes or scooters provide alternative means of transportation that assist in the reduction of local greenhouse gas (GHG) emissions, decrease vehicular traffic, and improve the overall quality of life; and WHEREAS, the City of Modesto is committed to protecting the public health, safety, and welfare of its residents while responding to advances and developments in technology as they relate to alternative modes of transportation modes; and WHEREAS, Assembly Bill 1286 enacted Title 10.1 (commencing with Section 2505) of the California Civil Code to require providers of shared mobility devices to enter into an agreement or obtain a permit from the city or county with jurisdiction over the area of use; and WHEREAS, the City seeks to establish a shared mobility device pilot program that requires shared mobility device providers to obtain a permit from the City in order to operate in Modesto and sets minimum operating requirements regarding maintenance, safety, customer service, insurance and indemnification, and compliance with California Vehicle Code and accessibility restrictions, through an Operating Agreement; and #15..
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WHEREAS, the intent of the pilot program is to implement state law, facilitate the use of shared mobility devices while ensuring the protection of public health and safety, including the safety of the public traveling by foot, bicycle, assisted mobility devices, or vehicle on public sidewalks, streets, and other public right-of-way, and establish positive working relationships with shared mobility device providers; and
WHEREAS, the pilot program will inform future City regulations regarding shared mobility devices.

NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Modesto hereby approves the creation of a pilot program to allow the use of a shared mobility service of stand-up electric scooters in the City of Modesto, and issuing a Shared Mobility (SM) permit to Bird Rides, Inc. with such terms and conditions defined by the Operating Agreement, and as determined necessary by the City Manager.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 10th day of May, 2022, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:

AYES:Councilmembers:

NOES:Councilmembers:

ABSENT: Councilmembers:
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ATTEST: _____________________________
DIANE NAYARES-PEREZ, City
Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
5038589.1
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PILOT OPERATING AGREEMENT
This Pilot Operating Agreement (the “Agreement”) is entered into by and between Bird Rides, Inc., located at 406 Broadway, Unit #369, Santa Monica, CA 90401 (the “Company”), and the CITY OF MODESTO, (the “City”), a municipal corporation of the State of California as of [May] __, 2022. The City and Company are referred to collectively herein as “Parties.”

1. Statement and Purpose
The purpose of this Agreement is to authorize the establishment of a pilot operation of a stand-up electric scooter sharing program within the City (the “Pilot”) and to establish rules, performance standards, and regulations governing the operator to ensure that the Pilot is consistent with the safety and well-being of bicyclists, pedestrians, and other users of the public rights-of-way and does not create a public nuisance pursuant to the Modesto Municipal Code section 9-9.501.

2. Scope and Term
This Agreement and its terms apply to the proposed deployment of stand-up electric scooter sharing systems within City’s jurisdictional boundaries by Company in connection with the Pilot.

Company shall not deploy a stand-up electric scooter sharing system in the City in violation of this Agreement. This Agreement and the Pilot shall remain in effect for a period of twelve (12) months, with an option to extend the term of this Agreement for an additional twelve (12) months if the City Manager, in his sole discretion, determines that extension of the Pilot is in the best interest of City and so notifies Company in writing of such intent to extend.

3. Procedures Prior to Operation
Prior to commencing operations in accordance with this Agreement, Company shall; a. Provide an affidavit of compliance with the terms and conditions of this Agreement for City’s review and approval.
b. Obtain a business license from the City.
c. Obtain Shared Mobility Permit from the City and pay the $250.00 fee.

Upon City’s written approval that Company has completed the above conditions and has implemented and is adhering to the rules and performance standards contained herein, Company may deploy Stand-up electric scooters in the City and commence operations pursuant to the Pilot.

4. Definitions
a. Stand-up electric scooters shall mean a device weighing less than one hundred fifty (150) pounds that (i) has handlebars and an electric motor, (ii) is solely powered by the electric motor and/or human power, and (iii) has a maximum speed of no more than twenty (20) mph on a paved level surface when powered solely by the electric motor. #15..
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b. Furniture zone shall mean the area of public-right-of way as identified in Exhibit D.

5. Operating Regulations
d. Company, and/or its service providers, agents, or assignee shall be responsible for operating a stand-up electric scooter pilot program in the City in accordance with the below requirements.
e. Stand-up electric scooters are to be ridden on streets, and where available, in bike lanes and bike paths. Stand-up electric scooters are to stay to the right of street lanes and to offer the right of way to bicycles in bike lanes and on bike paths. Use of stand-up electric scooters shall not be permitted on any sidewalks or areas of the City designated exclusively for pedestrian use. Users of stand-up electric scooters who violate these provisions may be fined by City.
f. Users of stand-up electric scooters shall be eighteen (18) years of age or older. Users of stand-up electric scooters who violate these provisions may be fined by City or Company.
g. Company shall provide easily visible contact information, including toll-free phone number and/or e-mail address on each stand-up electric scooter for members of the public to make relocation requests or to report other issues with devices. h. Hours of operation when Company’s stand-up electric scooters will be made available to rent for residents are 4 a.m. to midnight (local time). i. Company shall collect stand-up electric scooters at least every two days and reposition them in an orderly fashion at a high use location within the City. j. Company shall provide a maximum of one hundred (100) vehicles at launch. Company is permitted, upon written approval of City, to increase its fleet size on a monthly basis by 50 scooters, if Company’s fleet is providing on average more than 1.5 rides per stand-up electric scooter per day within the Pilot Areas and the Company demonstrated satisfactory compliance with this agreement. City may request data from Company in support of Company’s request to increase fleet size. City may request such data on a monthly basis to determine and demonstrate the utilization rate of vehicles in Company’s fleet, pursuant to Section 7.
k. Stand-up electric scooters may only be deployed in the Pilot Areas as depicted in Exhibit A to this Agreement. Company must include operational software in each stand-up electric scooter that deactivates the scooter when attempted to be operated outside of the Pilot Areas.
l. Company is to hold at least 1 contact for maintenance, collecting, and repositioning of stand-up electric scooters for every 200 in Company fleet. #15..
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m. Company shall have 24 hour customer service available during the operation of the program.
n. Company shall provide quarterly reports identifying ridership and, incident data to the City throughout the duration of the program.

4. Revenue Sharing
a. While this Agreement and Pilot are in effect, Company shall pay City a revenue-share of Ten Cents ($0.10) per ride to help active transportation improvements within the Pilot Area. Company shall pay the revenue-share to City on a quarterly basis, in arrears within thirty (30) days from the end of the preceding month.

5. Parking
a. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that stand-up electric scooters shall be parked upright in the furniture zone of the sidewalk, beside a bicycle rack, or in another area specifically designated for bicycle parking, or on the street next to an unmarked curb.
b. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that stand-up electric scooters shall not be parked in such a manner as to block the pedestrian clear zone area of the sidewalk; any fire hydrant, call box, or other emergency facility; bus bench; or utility pole or box.
c. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that users shall not park stand-up electric scooters in such a manner as to impede or interfere with the reasonable use of any commercial window display or access to or from any building.
d. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that users shall not park stand-up electric scooters in such a manner as to impede or interfere with the reasonable use of any bicycle rack or news rack. e. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that users may park stand-up electric scooters in on-street parking spaces in the following circumstances:
(i) When marked parking spaces are officially designated stations for such devices in business districts;
(ii) Where the furniture zone is less than three (3) feet wide; (iii) Where there is no furniture zone;
(iv) In neighborhoods with rolled curbs or with inadequate sidewalk space; and
(v) In marked parking spaces designated for motorcycles. #15..
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f. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that users may park stand-up electric scooters on blocks without sidewalks only if the travel lane(s) and 6-foot (6’) pedestrian clear zone are not impeded. g. Company shall ensure that user guidelines state, and designated fleet manager(s) ensure, that users shall not park stand-up electric scooters in the landscape/furniture zone directly adjacent to or within the following areas, such that access is impeded:
(i) Transit zones, including bus stops, shelters, passenger waiting areas, and bus layover and staging zones, except at existing bicycle racks;
(ii) Loading zones;
(iii) Disabled parking zone;
(iv) Street furniture that requires pedestrian access (e.g., benches, parking pay stations, bus shelters, transit
information signs, etc.);
(v) Curb ramps;
(vi) Entryways; and
(vii) Driveways.
h. Users of stand-up electric scooters who violate the user guidelines provided in this Section may be fined by City.
i. Company may stage its stand-up electric scooters in permitted parking areas as described in this section. To the extent Company desires to stage stand-up electric scooters in areas other than the public right-of-way, Company must first obtain written approval to do so from the appropriate City department, property owner, or public agency. j. If the City Manager, in his sole determination, finds that users of Company’s stand-up electric scooters are consistently violating the Parking requirements as described in this Section, the City Manager may terminate this Agreement in accordance with Section 11 below, and Company shall immediately remove stand-up electric scooters from the Pilot Areas upon notice of or before such termination date as described.

6. Operations
a. Company shall maintain twenty-four (24) hour customer service for users and citizens to report safety concerns, submit complaints, or to ask questions. Company shall maintain a multilingual website, call center, and/or mobile app customer interface that is available twenty-four (24) hours a day, seven (7) days a week. The aforementioned shall be compliant with the Americans with Disabilities Act.
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b. Company shall operate at all times as defined in this agreement including the Company’s Operation Plan Exhibit C.
c. In the event a safety or maintenance issue is reported for a specific device, that stand-up electric scooter shall be made unavailable to users and shall be removed within the timeframes provided herein. Any inoperable or unsafe device shall be repaired before it is put back into service.
d. Company shall respond to reports of incorrectly parked stand-up electric scooters, stand-up electric scooters continuously parked in one location for more than seventy-two (72) hours, or unsafe/inoperable stand-up electric scooters, by relocating, reparking, or removing the Stand-up electric scooters, as appropriate, within maximum twenty-four (24) hours of receiving notice that must include the location of the stand-up electric scooter. e. Company shall ensure that its guidelines provide notice to all users that:
(i) Stand-up electric scooters are to be ridden on streets, and where available, in bike lanes and bike paths;
(ii) Stand-up electric scooters are to stay to the right of street lanes and to offer the right of way to bicycles on bike lanes and bike paths;
(iii) Helmets are encouraged for all users;
(iv) Parking must be done in the designated areas; and
(v) Riding responsibly is encouraged.
f. Company shall ensure that stand-up electric scooter users are required to take a photo whenever they park their scooter at the end of a ride. g. Company shall provide written guidelines to stand-up electric scooter users on the City’s existing rules and regulations, safe and courteous riding, and proper parking.
h. If the City Manager, in his sole determination, finds that users of Company’s stand-up electric scooters are consistently violating the Operations requirements as described in this Section, the City Manager may terminate this Agreement in accordance with Section 10 below, and Company shall immediately remove stand-up electric scooters from the Pilot Areas upon notice of or before such termination date as described in Section 10 below.

7. Data Sharing
City may require Company to provide anonymized fleet and ride activity data for all trips starting or ending within the jurisdiction of City on any vehicle of Company or of any person or #15..
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entity controlled by, controlling, or under common control with Company, provided that, to ensure individual privacy:
a. such data is provided via an application programming interface, subject to Company’s license agreement for such interface, in compliance with a national data format specification such as the Mobility Data Specification; b. any such data provided shall be treated as a trade secret and proprietary business information, shall not be shared to third parties without Company’s consent, and shall not be treated as owned by City; and
c. such data shall be considered personally identifiable information and shall under no circumstances be disclosed pursuant to public records requests received by the local authority without prior aggregation or obfuscation to protect individual privacy, except as required by law.
d. Company shall provide and adhere to the following (e-j) Operator data to the City at its sole request.
e. Company shall provide data in the General Bikeshare Feed Specification (GBFS) and all endpoints contained within the Mobility Data Specification (MDS) “Provider” specification, including the following APIs or endpoints: 1. Trips 2. Status changes 3.

Vehicles 4. A real-time status feed, formats to the City Manager, and any authorized third-party contractor of the City through an application program interface made available to the City. Any MDS compatible API must expose data where:
(i) The trip starts in the City of Modesto, or
(ii) The trip ends in the City of Modesto
f. Company shall maintain or develop connections to ingest all MDS “Policy” endpoints that the city populates information for. g. Company shall maintain compliance with the most current published version of MDS, including the addition of any new APIs or fields not listed in these permit requirements, unless the Program Manager provides a written exception. Any changes or updates with the API will require at least 90-day notification to Vendor. h. The City Manager may adopt additional data sharing requirements that provide the City and any authorized third-party contractor of the City with real-time and collected shared mobility device data available through the operator’s application program interface. The City Manager may require operators to distribute surveys to their users. i. Company shall anonymize all data shared with the City or any authorized third-party contractor of the City.
j. Company shall comply with applicable federal, state, and local data privacy laws to protect the privacy of any personal information they receive. #15..
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8. Indemnification
Company agrees to indemnify, defend and hold harmless City (and City’s employees, agents, and affiliates) from and against all actions, damages, or claims brought against City arising out of Company’s negligence or willful misconduct, except that Company’s indemnification obligation shall not extend to claims of City’s (or City’s employees’, agents’, or affiliates’) gross negligence or willful misconduct. Company’s indemnification obligations shall survive for a period of two (2) years after expiration of this Agreement. Company shall be released from its indemnification obligations under this section to the extent loss or damage was caused by the City’s negligent construction or maintenance of public infrastructure. City shall promptly notify Company following receipt or notice of any claim for which indemnification is sought hereunder. It is understood that the duty of Company to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and endorsements required under this Agreement does not relieve Company from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to damages or claims for damages regardless of whether such insurance policies shall have been determined to apply. By execution of this Agreement, Company acknowledges and agrees to the provisions of this Section and that it is a material element of consideration.

9. Insurance
Prior to the operation of any aspect of the Pilot in connection with this Agreement, Company, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the operations authorized hereunder by Company, its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Company shall provide Certificates of Insurance, attached hereto and incorporated herein as Exhibit B, indicating that Company has obtained or currently maintains insurance that meets the requirements of this Section and under forms of insurance satisfactory, in all respects, to City.

Company shall maintain the insurance policies required by this Section throughout the term of this Agreement. Company shall not allow any subcontractor to commence work on any subcontract associated with the operations authorized by this Agreement until Company has obtained all insurance required herein for the subcontractor(s) or subcontractor(s) has obtained required insurance.

Company shall provide City with proof of insurance coverage exclusively for the operation of Stand-up Electric Scooters including: (a) Commercial General Liability insurance coverage with a limit of no less than $2,000,000.00 each occurrence and $5,000,000.00 aggregate; (b) Automobile Insurance coverage with a limit of no less than $1,000,000.00 each occurrence and $1,000,000.00 aggregate; (c) Umbrella or Excess Liability coverage with a limit of no less than $5,000,000.00 each occurrence/aggregate; and (d) where Company employs persons within the City , Workers’ Compensation coverage of no less than the statutory requirement. With the exception of Workers' Compensation, Umbrella or Excess Liability coverage may be used to satisfy the above requirements.
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Verification of coverage. Prior to beginning any work under this Agreement, Company shall furnish City with a certificate of insurance reflecting all required policies delivered to Company by the insurer, including complete copies of all required endorsements attached to those policies.

All copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If City does not receive the required insurance documents prior to Company beginning work, it shall not waive the Company’s obligation to provide them. City reserves the right to require complete copies of all required insurance policies at any time.

Additional insured; primary insurance. City and its officers, employees, agents, and volunteers shall be covered as additional insureds with respect to each of the following: liability arising out of activities performed by or on behalf of Company, including the insured’s general supervision of Company; products and completed operations of Company, as applicable; premises owned, occupied, or used by Company; and automobiles owned, leased, or used by Company in the course of operating pursuant to this Agreement. The coverage shall contain no special limitations on the scope of protection afforded to City or its officers, employees, agents, or volunteers.

A certified endorsement must be attached to all policies stating that coverage is primary insurance with respect to City and its officers, officials, employees, and volunteers, and that no insurance or self-insurance maintained by City shall be called upon to contribute to a loss under the coverage.

Waiver of Subrogation. Company hereby grants to City a waiver of any right to subrogation which any insurer of said Company may acquire against the City by virtue of the payment of any loss under such insurance. Company agrees to obtain any endorsement that may be necessary to affect this waiver
of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

10. Public Nuisance Pursuant to Modesto Municipal Code Section 9-9.501 –

IMMEDIATE TERMINATION
Pursuant to Modesto Municipal Code (“MMC”) section 9-9.501, A public nuisance consists of doing any act, or permitting or allowing any condition or thing to exist, occur, or accumulate upon any property within the City that is injurious to health, indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property and endangers the health or safety of others.

The rules and requirements outlined in this Agreement are intended to prevent Company’s operations under the Pilot to constitute an unlawful public nuisance pursuant to MMC 9-9.501.

In the event, in the sole determination of the City Manager, that users of Company’s stand-up electric scooters or Company fail to abide by the rules and operational requirements such that the Pilot program constitutes an unlawful public nuisance, the City Manager may terminate this #15..
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Agreement and the Pilot upon two (2) days written notice to Company and Company shall immediately remove stand-up electric scooters from the Pilot Areas upon or before such termination date.

11. Termination. In addition to the City Manager’s authority to terminate this Agreement pursuant to Section 10, this Agreement may also be terminated as described below.

Upon termination pursuant to this Section, all stand-up electric scooters shall be removed from the Pilot Areas upon notice of or before the effective date of the termination. b. Immediate Termination. This Agreement shall automatically terminate upon the bankruptcy or insolvency of either Party. c. Termination for Convenience. Either Party may terminate this Agreement upon seven (7) days prior written notice to the other Party.

12. Assignment
d. This Agreement may not be assigned or transferred to any other party. The Parties acknowledge that Company may utilize independent business logistics providers to facilitate local operations. Company’s use of these logistics providers does not constitute a transfer or assignment of this Agreement, and Company remains responsible for all obligations and requirements under this Agreement.
e. This Section shall not apply to the private sale or rental of stand-up electric scooters, provided that such scooters are not placed in the public right-of-way for shared public use.

13. General Provisions
f. Severability. If any of the provisions in this Agreement are found by a court of competent jurisdiction to be, or are in fact, illegal, inoperative, or unenforceable, those provisions shall not affect other terms, conditions, or applications which can be given effect without the invalid term, condition, or application; to this end, the terms and conditions of this Agreement are declared severable.
g. Modifications. No modification of this Agreement shall be effective unless it is in writing and signed by an authorized representative of each of the Parties. h. No Agency. No agency, partnership, joint venture, employeeemployer, or franchiser-franchisee relationship is intended or created by this Agreement. i. Governing Law and Interpretation. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California, without regard to or application of California’s conflict of law principles. Any action to enforce or interpret any provision of this Agreement shall be venued in the court of competent jurisdiction in Stanislaus County.
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j. No Waiver. The failure or delay of either Party to exercise any right, power, or privilege under this Agreement will not operate as a waiver thereof. The waiver of any preach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this agreement. k. Entire Understanding. This Agreement comprises the entire understanding between City and Company and supersedes all prior or contemporaneous agreements, written or oral, between the Parties regarding the subject matter contained herein.

The Parties have executed this Agreement as of the Effective Date. __________________________ ____________________________ Bird Rides, Inc. City of Modesto
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EXHIBIT A

MAP OF PILOT AREA
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EXHIBIT B

CERTIFICATES OF INSURANCE
5003347.1
5003347.4
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EXHIBIT C

OPERATIONAL PLAN
Operations:

Our Fleet Manager program provides local economic opportunity and bespoke block-byblock operational expertise, care and consideration.

We identify and recruit our Fleet Managers directly from the community, focusing on providing opportunities to small, locally owned businesses and entrepreneurs as well as Certified Women- or Minority-Owned Businesses. Before partnering with a prospective Fleet Manager, we ensure they meet and exceed our standards for operational excellence using a rigorous vetting process and the following criteria.

Candidates must:
● Be a trusted member of the local community with strong references. ● Prioritize long-term staffing arrangements with advancement opportunities and a real living wage as opposed to short-term, temporary work.
● Have existing local infrastructure (e.g., warehouse with ample space for charging and storage) certified for safe use by local workplace safety standards. ● Have experience managing logistics or operations, with a strong preference for shared micromobility.

As well as demonstrate commitment to:
● Providing the safest and most reliable service.
● Hiring locally.
● Developing or expanding any existing diversity and inclusivity policies in recruitment and retention.
● Using renewable energy to charge vehicles.
● Using zero-emission vehicles for deployment, rebalancing and collection.

When we execute a contract with a Fleet Manager, we commit to providing long-term support and resources as well as initial guidance on operational setup and mandatory training.

Maintenance:

Our latest vehicles are equipped with industry-leading self-diagnostics programmed for 400 different fault codes. When triggered, the systems can take a vehicle off the road immediately if a safety issue is detected or create information for later consumption by a technician. We keep a record of maintenance performed on each vehicle and station, which is available upon request. #15..
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Field Vehicle Inspection: Our local operations team conducts frequent field inspections of our vehicles to assess:
● Drivetrain
● Tires
● Steering
● Brakes
● Contact points and sanitization
● Front and rear lights
● Stickers and labels
● Electronic equipment, including QR code,
GPS, locking mechanisms, alarms, and
display screen
● Battery and motor
If a Bird needs a quick repair (e.g., tightening a part), our team performs maintenance on the spot or flags the Bird for pickup.

Maintenance and Service Level Agreements (SLAs)
We establish SLAs in coordination with local authorities. The chart below provides an overview of our high standards for removing and repairing damaged, deficient, unclean or unusable vehicles in all our markets.

Concern Standard Resolution Time
Deficient/ Damaged Identified and removed (if
necessary) through the methods
described below.

Made unavailable for rental
immediately and removed within
12 hours.

Minor Field Repair Minor repairs that can be
addressed in the field include:
replacing a kickstand, tightening
the handlebars, and fixing minor
cosmetic damage.

Minor repairs requiring removal
include: changing a brake,
changing an accelerator, and
replacing a brain.

Repaired in the field within: five
minutes for kickstand; 20 minutes
for all others.

Major Service Center Repair Major repairs include: changing tires, replacing the stem/neck,
replacing the lights, and fixing
major cosmetic damage. If a
vehicle cannot be repaired, it is
recycled. All operations staff
complete recycling training during
onboarding.

At least one repair completed per
hour. Recycled within 72 hours.

Collecting/Repositioning Fleet managers touch every device Local team members will service #15..
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multiple times per day to ensure
they’re parked in locations most
likely to receive rides. They also
decide whether the device should
be rebalanced to another location
to ensure greater utilization or
move the device should it need to
be more neatly parked.

Modesto from 6:00 a.m. to 6:00
p.m. daily (defined as business
hours) and will be available to
move vehicles within 4 hours
during the 6a-6p window and within
10 hours outside of business hours.

Customer Service:

Bird is committed to making it as easy as possible for the community to provide feedback regarding improperly parked devices, equipment issues, or other concerns. We have several customer service channels (see below) and use Zendesk, a leading customer service software suite, to receive, log and resolve customer complaints. Our customer service representatives process all complaints submitted via our various channels, prioritizing those related to improperly parked devices to ensure we repark them within two hours of notification. We alert our local team via the “Operator” mode of the Bird app, allowing them to view the location of the vehicle and address it quickly and efficiently.

Bird’s Customer Service Channels:
● Phone Number: 1-866-205-2442. Our staffed, toll-free customer service line provides support 24 hours per day, 365 days a year. It also accommodates TTY relay services. ● Website: http://www.bird.co
● Email: [email protected]
● Twitter: @BirdRide
● Instagram: @Bird
● Online Form: http://www.bird.co/contact-us/
● Live Text-to-Chat: Available in the Bird app
● Community Mode: This in-app feature allows both riders and non-riders to report unsafe behavior, including irresponsible riding or improper parking, in real time.

Staging & Deployment:

Bird recommends a phased deployment plan, giving us the necessary time to take a careful and coordinated approach in educating riders, evaluating their behavior and adjusting our operations as required. We carry this out in cooperation with Modesto officials and community stakeholders.

In the case of Modesto, our Account Manager will collaborate with city staff from the commencement of the program, which will assist us with implementing necessary and informed adjustments over the course of the program.

Phase 1 - Early 2022:

In Phase 1, we propose deploying 100 scooters in the city, which would be available throughout the operational boundaries of the city as identified in Exhibit A. This fleet size would be appropriate for the #15..
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launch as residents become used to the program and learn to ride and operate scooters safely. We will assign an operations team to deploy, rebalance and maintain vehicles in Modesto. Phase 1 aims to cover the downtown and nearby neighborhoods, while allowing scooters to travel as users desire. By introducing the program gradually, we enable the local community to become accustomed to e-scooters and to allow Bird and Modesto to address any concerns before the fleet increases.

We will meet with City of Modesto officials to discuss the community response, usage, and safety data reports of Phase 1. As we monitor usage, we would expect to ask to increase the vehicle fleet in increments of 50 to meet resident demand. We would only add scooters with approval from the city.

Phase 2 – Early/Mid 2022:

As the weather improves, ridership increases, and unfilled demand is identified in areas outside of the downtown core, we would seek to commence Phase 2 and increase fleet size to meet demand. If the City approves of this expansion, we would propose deploying an additional 50 scooters each month throughout Modesto. Our Account Manager would collaborate closely with officials from both the City and local community groups to ensure implementation is successful and satisfies the City’s transportation objectives. The overall deployment after Phase 2 would be 200 scooters throughout Modesto. Our operations team would be responsible for deploying and rebalancing vehicles, ensuring that an appropriate level is constantly maintained in Modesto.

Phase 3 – Mid/Late 2022:

After 6 months of operations, Bird will have a deep understanding of the Modesto market and how to meet the unique needs of your community. We will strive to be seen as a valued business and transportation provider for Modesto. The incremental increases seen in Phase 1 & 2 will continue until demand has leveled off.

Staging:

Bird stages scooters each morning in nests (identifiable scooter parking locations). Nests are virtual and dynamic, meaning our team can work with the city to change and reposition them at any time to best meet the city’s needs. We can also provide data to the city to assist in the planning process for moving or establishing new parking areas.

Bird AI, our proprietary operations software, analyzes more than 50 rider demand signals and regulatory requirements by geohash, enabling us to accurately determine where Birds should be deployed or rebalanced throughout the day.

Our platform will automatically determine which locations to populate based on vehicle concentration, time of day and city-specific requirements to ensure broad and equitable vehicle coverage across the service area.

Bird’s Fleet Managers actively monitor and redistribute our e-scooters across the service area (outlined below) during operational hours. Our deployment and pickup times are designed to ensure the best availability of our vehicles, guaranteeing, in every zone of the service area, our riders can find nearby scooters available during the peak hours of demand and that the scooters are charged and ready-to-go. #15..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 10, 2022
Date: April 7, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: California Water and Wastewater Arrearage Payment Program Update CONTACT: Jennifer Martin, Revenue Collection and Compliance Manager, [email protected], (209) 571-5892
DESCRIPTION:

Consider accepting funds from the California Water and Wastewater Arrearage Payment Program (CWWAPP) for wastewater arrearage in an amount not to exceed $1,332,915, and approving participation in the California Department of Community Services and Development Low Income Household Water Assistance Program (LIHWAP); and amending the Fiscal Year 2021-22 Operating Program Budget in the amount of $1,332,915 in the Sewer Fund (4210) to recognize grant revenue from the State Water Resource Board – California Water and Wastewater Arrearage Payment Program offsetting delinquent account balances for Sewer Utility Accounts. (Funding Source: Sewer Funds)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City’s Strategic Plan Initiatives, Goal D:

Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

On March 4, 2020, Governor Newsom proclaimed a state of emergency due to the COVID-19 pandemic, issued Executive Order N-33-20 to require individuals to stay at home except as needed to maintain continuity of critical operations, issued Executive Order N-42-20 prohibiting discontinuation of water service indefinitely, and issued Executive Order N-60-20 that created a risk-based approach to reopening the economy.

There have been economic impacts as a result of the COVID-19 pandemic and associated public health measures, including leaving many Californians unable to pay their water and wastewater bills due to lack of reliable and consistent employment. The impact of customers’ inability to pay for these utilities continue to negatively affect City revenues, and various executive orders and/or legislation prohibited service terminations.
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City Council, May 10, 2022
California Water and Wastewater Arrearage Payment Program Update

In response to the economic conditions caused by the COVID-19 pandemic, the State established Assembly Bill No. 128 and amended by Senate Bill No. 129, which provides nearly $1 billion to the State Water Resources Control Board to administer the California Water and Wastewater Arrearage Payment Program (CWWAPP)1 to reduce delinquent water and wastewater balances for customers experiencing financial hardships related to the economic impacts of the COVID-19 pandemic. Funding for CWWAPP is generated from the State’s share of the federal Coronavirus Fiscal Recovery Funds.

On March 8, 2022, Council approved Resolution No. 2022-141, accepting $2,716,416 in funding received from the CWWAPP for water arrearages incurred during the COVID relief period of March 4, 2020 to June 15, 2021. These funds were posted to customer utility accounts on March 9, 2022 for a total amount of $2,261,231. On March 28, 2022 letters were mailed to all customers who were recipients of the grant funding, notifying them of the amount of the credit applied to their utility account and offering a payment plan on any remaining balance to be paid over a period of up to twelve months. The City was also able to utilize approximately $10,567 of the $79,119 Administrative Costs received. As required by the grant, a refund of any unused funds in the estimated amount of $444,618 will be submitted back to the State of California by July 28, 2022.

DISCUSSION:

On March 8, 2022, with Resolution No. 2022-141, Council authorized the submission of an application to the CWWAPP for the wastewater arrearage amount estimated at $4,215,784. This initial estimate of $4,215,784 was based on the total of all delinquent wastewater arrearages in our Utility Billing system. Upon preparation for submission of the application for wastewater arrearage funding, staff were required to compile delinquent wastewater balances due only during the COVID relief period of March 4, 2020 to June 15, 2021. When the application was submitted to the State on March 22, 2022 this balance was revised to $1,294,092.

The funding allows Wastewater utilities to expend up to three percent (3%), or up to $1 million, whichever is less, for administrative costs the system incurs in applying for assistance or complying with Program requirements. For Modesto, this amount equals $38,823. Remaining funds of the $1,332,915 received by the City must be applied as bill credits to customers within 60 days of receiving funds. The City will receive the wastewater arrearage funding in May, 2022 and the Utility Billing team will be working diligently to post these credits no later than June 29, 2022.

Additional support for utility bill customers was provided in Assembly Bill 148, which created customer protections that require a community water system to offer a payment plan to affected customers and refrain from discontinuing service until (1) September 30, 2021, or (2) for a customer that has been offered an opportunity to participate in a payment plan, the date the customer misses the enrollment deadline for, or defaults on, the payment plan, whichever is later.

The City had implemented a payment plan prior to COVID-19, and this referenced legislation and continues to communicate with delinquent customers to inform them about the City’s payment plan structure.
1 California Water and Wastewater Arrearage Payment Program (CWWAPP) - https://www.waterboards.ca.gov/arrearage_payment_program/ #16..
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City Council, May 10, 2022
California Water and Wastewater Arrearage Payment Program Update

As part of receiving this funding similar to the water arrearage, the City must comply with the program requirements defined below which include:
1) Waiving customer late fees for any arrearage accrued during the COVID-19 pandemic bill relief period;
2) Notifying customers of the amount credited to their account; 3) Offering to enroll customers with remaining debt into a payment plan; and 4) Allowing customers 30 days to enroll in the payment plan The program requirements allowed the City to apply for funding for delinquent balances incurred during the established COVID relief period of March 4, 2020 to June 15, 2021. The City has not moved forward with any water shutoffs at this time. The City’s priority is to apply the credits received from this funding and actively communicate with the customers about establishing a payment plan for the remaining delinquent balance due to the City. In addition, the City will provide communication at least 30 days in advance to advise on the timeframe of when shutoffs will be re-enforced due to no payment being applied against their account.

The State of California Department of Community Services and Development is launching a new program in May 2022 called the Low-Income Household Waster Assistance Program (LIHWAP)2.

This is a program that City of Modesto residential utility customers will be eligible to apply for with the State of California. The program provides assistance to eligible customers to pay their delinquent water and wastewater bill. California has been allocated $116 million in one-time funding for this program established by Congress in December 2020. The program will be open from May/June 2022 to August 31, 2023. While the State manages the program and its applications, the City may enroll as a Direct Payment partner. This will allow the City to directly receive the funds received for eligible customers as an Automated Clearing House (ACH) payment to be applied to the customer’s utility account for outstanding charges. Eligibility is based on a monthly household income ranging from $2,565 for a household of one (1) to $7,102 for a household of ten (10). All qualified customers will be able to receive a one-time payment, up to a maximum of $2,000. The benefit amount can cover the customer’s past due balance, current charges, fees (including late charges), and taxes. The goal of the program is to prevent disconnection for non-payment or to restore service.

FISCAL IMPACT:

The federal funding relief received for the wastewater debt in the amount of $1,332,915 will be receipted in the Wastewater Fund and help address the account delinquencies over 60 days past due, which amounts to $1,294,092 as of March 22, 2022. This relief will cover the unpaid bills during this relief period for 5,637 residential and 83 commercial customers. The amount of funding that may be received from the LIHWAP program is unknown at this time. Staff will provide an update on funds received by early 2023.

COMMITTEE RECOMMENDATION:

This item was not reviewed by a Council Committee and was approved by City Manager to proceed directly to Council to expedite the program.
2 Low Income Household Water Assistance Program (LIHWAP) - https://www.acf.hhs.gov/ocs/programs/lihwap #16..
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City Council, May 10, 2022
California Water and Wastewater Arrearage Payment Program Update

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting funds from the California Water and Wastewater Arrearage Payment Program (CWWAPP) for wastewater arrearage in an amount not to exceed $1,332,915 and approving participation in the California Department of Community Services and Development Low Income Household Water Assistance Program (LIHWAP).

Resolution amending the Fiscal Year 2021-22 Operating Program Budget in the amount of $1,332,915 in the Sewer Fund (4210) to recognize grant revenue from the State Water Resource Board – California Water and Wastewater Arrearage Payment Program offsetting delinquent account balances for Sewer Utility Accounts.

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Grant Resolution

2. Budget Resolution

3. Exhibit A
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION ACCEPTING FUNDS FROM THE CALIFORNIA WATER AND

WASTEWATER ARREARAGE PAYMENT PROGRAM (CWWAPP) FOR
WASTEWATER ARREARAGE IN AN AMOUNT NOT TO EXCEED $1,332,915, AND

APPROVING PARTICIPATION IN THE CALIFORNIA DEPARTMENT OF

COMMUNITY SERVICES AND DEVELOPMENT LOW INCOME HOUSEHOLD

WATER ASSISTANCE PROGRAM (LIHWAP)
WHEREAS, on March 4, 2020, Governor Newsom proclaimed a state of emergency due to the COVID-19 pandemic, issued Executive Order N-33-20 to require individuals to stay at home except as needed to maintain continuity of critical operations, issued Executive Order N-42- 20 prohibiting discontinuation of water service indefinitely, and issued Executive Order N-60-20 that created a risk-based approach to reopening the economy, and WHEREAS, in response to the economic conditions caused by the COVID-19 pandemic, the State established Assembly Bill No. 128 and amended by Senate Bill No. 129, which provides nearly $1 billion to the State Water Resources Control Board to administer the California Water and Wastewater Arrearage Payment Program (CWWAPP) to reduce delinquent water and wastewater balances for customers experiencing financial hardships related to the economic impacts of the COVID-19 pandemic, and
WHEREAS, on March 8, 2022, Council approved Resolution No. 2022-141, accepting $2,716,416 in funding received from the CWWAPP for water arrearages incurred during the COVID relief period of March 4, 2020 to June 15, 2021, and WHEREAS, on March 8, 2022, with Resolution No. 2022-141 Council authorized the submission of an application to CWWAPP for the wastewater arrearage amount estimated at $4,215,784; this initial estimate of $4,215,784 was based on the total of all delinquent wastewater arrearages in our Utility Billing system; upon preparation for submission of the application for wastewater arrearage funding, staff were required to compile delinquent wastewater balances due #16..
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only during the COVID relief period of March 4, 2020 to June 15, 2021; when the application was submitted to the State on March 22, 2022 this balance was $1,294,092, and WHEREAS, the funding allows Wastewater utilities to expend up to three percent (3%), or up to $1 million, whichever is less, for administrative costs the system incurs in applying for assistance or complying with Program requirements; for Modesto, this amount equals $38,823 and the remaining funds of the $1,332,915 received by the City must be applied as bill credits to customers within 60 days of receiving funds; the City will receive the wastewater arrearage funding in May, 2022, and
WHEREAS, as part of receiving this funding, the City must comply with the program requirements which include waiving customer late fees for any arrearage accrued during the COVID-19 pandemic bill relief period, notifying customers of the amount credited to their account, offering to enroll customers with remaining debt into a payment plan; and allowing customers 30 days to enroll in the payment plan, and
WHEREAS, the State of California Department of Community Services and Development is launching a new program in May 2022 called the Low-Income Household Waster Assistance Program (LIHWAP) and this is a program that City of Modesto residential utility customers will be eligible to apply for with the State of California, and WHEREAS, the program provides assistance to eligible customers to pay their delinquent water and wastewater bill and California has been allocated $116 million in one-time funding for this program established by Congress in December 2020, and WHEREAS, the program will be open from May/June 2022 to August 31, 2023; while the State manages the program and its applications, the City may enroll as a Direct Payment partner and this will allow the City to directly receive the funds received for eligible customers as an Automatic Clearing House (ACH) payment to be applied to the customer’s utility account for outstanding charges; eligibility is based on a monthly household income ranging from $2,565 #16..
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for a household of one (1) to $7,102 for a household of ten (10); all qualified customers will be able to receive a one-time payment up to a maximum of $2,000 and the benefit amount can cover the customer’s past due balance, current charges, fees (including late charges), and taxes; the goal of the program is to prevent disconnection for non-payment or to restore service.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves accepting funds from the California Water and Wastewater Arrearage Payment Program (CWWAPP) for wastewater arrearage in an amount not to exceed $1,332,915, and approves participation in the California Department of Community Services and Development Low Income Household Water Assistance Program (LIHWAP).

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to execute such agreement and take such actions as necessary to carry out the purpose of this Resolution.
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BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was considered at a regular meeting of the Council of the City of Modesto held on the 10th day of May 2022, by Councilmember _______________, who moved its adoption, which motion being duly seconded by Councilmember ________________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmember:

NOES: Councilmember:

ABSENT: Councilmember:

ATTEST: _____________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2021-22 OPERATING PROGRAM BUDGET IN AN AMOUNT OF $1,332,915 IN THE SEWER FUND (4210) TO

RECOGNIZE GRANT REVENUE FROM THE STATE WATER RESOURCE
BOARD – CALIFORNIA WATER AND WASTEWATER ARREARAGE PAYMENT

PROGRAM OFFSETTING DELINQUENT ACCOUNT BALANCES FOR SEWER

UTILITY ACCOUNTS
WHEREAS, a financial analysis has been completed and it has been determined that a budget adjustment is required to the Annual Operating Budgets of the City of Modesto for Fiscal Year 2021-22.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year 2021-22 Annual Operating budget as shown in Exhibit A, which is attached hereto and incorporated by reference herein.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 10th day of May 2022, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following votes:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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City Council, May 10, 2022
California Water and Wastewater
Arrearage Payment Program
Update - Budget Adjustment
Report

EXHIBIT A
FISCAL YEAR 2021-22

UTILITIES
 A budget adjustment to the Fiscal Year 2021-22 Annual Operating Program Budget in the amount of $1,332,915 in the Sewer Fund (4210) to recognize grant revenue for Wastewater Arrearage Payment Program offsetting delinquent account balances for Sewer Utility Accounts
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 10, 2022
Date: April 26, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Stephan Christensen, Budget Manager
SUBJECT: Mayor’s Final Budget Modifications and Fiscal Year 2022-23 Proposed Budget CONTACT: Stephan Christensen, Budget Manager, [email protected], 209-577-5390
DESCRIPTION:

Consider and review the Draft Budget as submitted by the City Manager with the Mayor’s Final Budget Modifications and combining the documents into the Proposed Budget for Fiscal Year 2022-23, and noticing a public hearing to be held on June 7, 2022 for Council’s consideration and adoption of the Fiscal Year 2022-23 Proposed Budget and related actions. (Funding Source: All City Funds)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus on Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

There are specific steps to adopt a final budget according to the City of Modesto’s Charter.

Initial steps include the compilation and review of the City Manager’s Draft Budget. This Draft Budget is then submitted to the City Council’s Finance Committee for review under public budget workshops. These workshops occurred on April 19th, April 20th, and April 21st. The City Manager’s Draft Budget totals approximately $508 million in operating expenditures, of which $171.4 million is in the General Fund. The public received notice of these workshops through the City’s website, social media, and other print media.

In accordance with Section1303 of the City of Modesto Charter, the Mayor is to prepare and deliver final modifications, if any, to the Draft Budget at least thirty (30) days prior to the new fiscal year. The Mayor has prepared her Final Budget Modifications Message which includes language related to final budget modifications. This message has been delivered to Councilmembers via email and will be made available to the public on the City’s website. The message will also be included in the final City of Modesto Fiscal Year 2022-23 Adopted Budget book.
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City Council, May 10, 2022
Mayor’s Final Budget Modifications and Fiscal Year 2022-23 Proposed Budget

DISCUSSION:

The City Manager’s Fiscal Year 2022-23 Draft Budget
Remaining cognizant of the pressures placed upon the City’s General Fund budget due to the ongoing COVID-19 pandemic, the City Manager’s Draft Budget for Fiscal Year 2022-23 continues to make reductions to combat the City’s structural deficit and expenditures that continue to outpace revenue growth. The Draft Budget makes a number of reductions spread across the various General Fund departments, inclusive of strategic freezing of vacant positions and the use of one-time reduction options. Additionally, the Draft Budget includes the use of rate reductions to the Workers Compensation Internal Service Fund to close the shortfall of $8.1M.

Future projections show that the City is moving out of the pandemic as it is anticipated that revenues will continue to slowly grow in the upcoming fiscal year. While revenues are rising from the current budgeted amounts, the pace at which they are increasing (3%) is much lower than the pace of growth for expenditures (7%). For example, pension costs continue to rise, and costs for the pandemic-related response created a large impact to the City’s budget in terms of staff time and supply costs.

Additional work will be done in the coming months as the City is due to receive the second allotment of the $45.9 million in funds from the Federal Government’s American Rescue Plan Act allocation. Staff continues to work with City Council to build a plan for the second allocation of funds to ensure that they are used effectively and, in a way, as to truly benefit the community and the future of Modesto.

The chart below shows a breakdown of the major funds that make up the total operating budget of $508 million for the City Manager’s Draft Budget for Fiscal Year 2022-23:

Fund Name Amount
General Fund $ 171,378,570
Internal Service Funds $ 93,081,668
Water Fund $ 67,108,908
Wastewater Fund $ 60,705,942
Other Funds $ 38,901,945
Surface Transportation Fund $ 25,502,273
Insurance Funds $ 23,101,852
Solid Waste Funds $ 13,346,623
Storm Drain Fund $ 8,026,395
Golf Fund $ 3,669,062
Centre Plaza Fund $ 1,897,416
Airport Fund $ 1,260,339
TOTAL FUNDS $ 507,980,994
The Fiscal Year 2022-23 General Fund Operating Budget was facing an initial shortfall of $8.1 million. Department budgets have reached the point where reduction options are limited without heavily reducing programs and the City continues to avoid using one-time General Fund Emergency Reserves to pay for ongoing needs.
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City Council, May 10, 2022
Mayor’s Final Budget Modifications and Fiscal Year 2022-23 Proposed Budget

To balance the General Fund budget, reductions of vacant positions within the Police Department, Parks, Recreation and Neighborhoods, Community and Economic Development, and City Manager’s Office were frozen, discretionary budgets were reduced, and a rate reduction to the Workers Compensation Internal Service Fund was taken. In order to address, the remaining shortfall, there is a recommendation for the use of one-time funds from the American Rescue Plan Act Funds for COVID Expense/Revenue Loss. With the additional flexibility of the American Rescue Plan in terms of the allowance of recovery of lost revenues due to the pandemic, the City was able to close the shortfall using the following strategies:

Proposed Options for Balancing the General Fund Operating Budget Amount (in Millions) Increase in Departmental Revenues $ 0.22
Freezing of Vacant Positions (10.0 FTEs) $ 1.52
Workers Compensation ISF Rate Reduction (16%) $ 0.86
Department Discretionary Reductions $ 0.70
Department Position/Staffing Savings $ 0.47
Finance Committee Approved Adjustments $ (0.08)
American Rescue Plan Funds (COVID Exp/Rev Loss) $ 4.50
TOTAL PROPOSED SAVINGS $ 8.19
Closing the shortfall was challenging as reductions to departments continue to be difficult. Many of the discretionary expenditures have already been reduced from department budgets in previous fiscal years. The reductions set forth in this budget process continued to focus on areas where staffing could be reduced through the freezing of vacant positions. No filled positions were eliminated as part of the departmental reductions proposed in this budget.

Mayor’s Final Budget Modifications
As required by the City’s Charter (Article XIII Section 1303 and Section 1304), the Mayor shall prepare and deliver to Council the Mayor’s Final Budget Modifications on the Draft Budget.

Following the receipt of the Mayor’s Final Budget Modifications, the Council shall then consider and review the draft budget as submitted by the City Manager together with the Mayor’s Final Budget Modifications and may make such revisions as the Council may deem advisable. The document that results from this process shall be deemed the “Proposed Budget” and shall be considered for approval at a hearing prior to June 30th for adoption of the Final Budget.

This year, the City Councilmembers were able to attend and participate in the Finance Committee Budget Workshops that were held on April 19th, April 20th, and April 21st. The Draft Budget that is being presented to City Council is largely, a collaborative effort.

As part of this item, the Mayor has submitted her message which includes any Final Budget Modifications. The message describes the Mayor’s position that no changes are being recommended to the budget at this time and that Draft Budget be moved forward for consideration by the Council as the Proposed Budget in June.

FISCAL IMPACT:

The Fiscal Year 2022-23 Proposed Operating Expenditure Budget (inclusive of Transfers Out) is approximately $508 million of which the General Fund budget is $171.4 million. Public Safety continues to be the largest portion of the General Fund expenditure budget at $131.5 million.

This represents 77% of the total General Fund operating expenditure budget. #17..
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City Council, May 10, 2022
Mayor’s Final Budget Modifications and Fiscal Year 2022-23 Proposed Budget

All other active funds of the City are shown to be solvent and include adjustments to expenditures to maintain reasonable reserve levels.

The Proposed Budget can be found on the City’s website at the following link:
https://www.modestogov.com/ArchiveCenter/ViewFile/Item/3563 COMMITTEE RECOMMENDATION:

This Finance Committee approved and recommended forwarding the City Manager’s Draft Budget for Fiscal Year 2022-23 to Council for final review and adoption by a 3-0 vote on April 21, 2022 at the Finance Committee Budget Workshops.

As other financial impacts develop throughout Fiscal Year 2022-23, staff will report back to Finance Committee and City Council for recommendation and approval of modifications to the adopted budget within the first quarter of the new fiscal year.

CEQA/NEPA REQUIREMENTS:

N/A
RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution combining the City Manager’s Draft Budget and the Mayor’s Final Budget Modifications into the Proposed Budget for Fiscal Year 2022-23, and noticing a public hearing to be held on June 7, 2022 for Council’s consideration and adoption of the Fiscal Year 2022-23 Proposed Budget and related actions.

Approved by:

Joseph P. Lopez, City Manager
Attachment:

1. Resolution Mayor’s Final Budget Modifications

2. FY 2022-23 Mayor’s Final Budget Modifications Message

3. Fiscal Year 2022-23 Proposed Budget -
https://www.modestogov.com/ArchiveCenter/ViewFile/Item/3563 #17..
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION COMBINING THE CITY MANAGER’S DRAFT
BUDGET AND THE MAYOR’S FINAL BUDGET MODIFICATIONS
INTO THE PROPOSED BUDGET FOR FISCAL YEAR 2022-23, AND
NOTICING A PUBLIC HEARING TO BE HELD JUNE 7, 2022 FOR
COUNCIL’S CONSIDERATION AND ADOPTION OF THE FISCAL
YEAR 2022-23 PROPOSED BUDGET AND RELATED ACTIONS
WHEREAS, the Finance Committee heard the City Manager’s Draft Budget on April 19th, April 20th, and April 21st through a series of Budget Workshops, and WHEREAS, the Finance Committee approved the City Manager’s Draft Budget with a 3- 0 vote and approved the budget to be moved on to Council for final review and adoption, and WHEREAS, the City’s Charter, Article XIII Section 1303 and Section 1304 requires that the Mayor has the opportunity to make any final budget modifications to the City Manager’s Draft Budget at least 30 days prior to the end of the fiscal year and adoption by City Council, and WHEREAS, the Mayor has presented her modifications to the City Manager’s Draft Budget to City Council and has presented no changes and recommended that the Draft Budget be moved forward to Council as the City of Modesto’s Fiscal Year 2022-23 Proposed Budget for adoption consideration, and
WHEREAS, the City of Modesto’s Fiscal Year 2022-23 Proposed Budget will be inclusive of the City Manager’s Draft Budget and the Mayor’s Final Budget Modifications and will be heard at a public hearing scheduled to be held on June 7, 2022.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the combination of the City Manager’s Draft Budget as well as the Mayor’s Final Budget Modifications into the City of Modesto’s Fiscal Year 2022-23 Proposed Budget and that a public hearing will be held on June 7, 2022 for the adoption of the Fiscal Year 2022- 23 Proposed Budget.

The foregoing resolution was introduced at a regular meeting of the Council of the City #17..
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2 of Modesto held on the 10th day of May 2022, by Councilmember _________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following votes:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________________
JOSE M. SANCHEZ, City Attorney
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OFFICE OF THE CITY CLERK

NOTICE OF SPECIAL MEETING
Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on
TUESDAY, MAY 10, 2022 at 4:45 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
Employee Organization: Modesto Police Non-Sworn Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
Employee Organization: Modesto Police Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association #18..
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CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees May 6, 2022 BY ORDER OF THE CHAIR
/S
Diane Nayares-Perez, CMC, City Clerk
Posted pursuant to Government Code Section 54956 on the bulletin board at Tenth Street Place on at by
date time signature
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TO: THE CLERK OF THE CITY OF MODESTO
RE: CLOSED SESSION
Pursuant to Section 2-1.02 of the Modesto Municipal Code, you are hereby authorized and empowered to call a special Closed Session meeting of the Council of the City of Modesto to be convened on
TUESDAY, MAY 10, 2022 at 4:45 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
Employee Organization: Modesto Police Non-Sworn Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
Employee Organization: Modesto Police Management Association #18..
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CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees May 6, 2022 BY ORDER OF THE CHAIR
/S
__________________________
SUE ZWAHLEN, Mayor
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